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What is a time consistency problem, in general. What is the time inconsistency problem with inflation policy? What is the Fed’s Loss function? The model we used shows that inflation will be higher than would be optimal - for both the public and the Fed; this means that it is a model of “inflationary bias.” How can the effects of reputation eliminate this bias. (Think about the diner/waiter game played one time only, versus being played over and over again on an on-going basis.
What role do the measurements of unemployment and inflation have on the management of an organization?
Suppose further that the MCP is 0,8 if the government wants to increase the real GDP to 2000 billions, by how much should the government increase /decrease its lump-sum taxes? Assume the price level is fixed.
You are the manager of a monopoly. A typical consumer’s inverse demand function for your firm’s product is P=100-20Q, and your cost function is C=20Q. Determine the optimal two-part pricing strategy. How much additional profit do you earn using a two..
Which of the following pairs represent an advantage and a disadvantage of marketing to a mobile phone rather than a fixed computer?
Consider the Rubinstein bargaining model of dividing $1 between A and B. A makes the first offer. If B accepts the offer then game ends. If B rejects the offer then B makes an offer to A in the next day. Suppose the bargaining game lasts for 4 days. ..
An important way to reduce water pollution from farms is to plant a buffer zone of bushes between crops and the water. Economists estimate that for each bush planted there is a $20 gain in reduced pollution. Market supply and demand curve for the bus..
Your task is to write a report that describes, explainsand analyses three relevant newspaper articles published in the UK national print press.
Under what conditions would firms be likely to support an industry-wide advertising ban. Please provide a few examples.
The following question is based on fixed exchange rate and/or flexible exchange rate regime in an open macroeconomic model. The answers must be written in your words along with graphical illustration. Without explaining in your words, the graphical i..
What single sum of money at t=4 is equivalent to receiving $5,000 at t=1, $6,000 at t=2, $7,000 at t=3, and $8,000 at t=4 is money is compounded at a rate of 8% per time period?
Discuss the following excerpt from a recent story in the Wall Street Journal. In your discussion demonstrate that you can use the concepts of: "price discrimination and "barriers to entry" to explain:
King crabs in the Bering Sea are a common resource. The following diagram shows the demand curve (the MB of consumption) and the supply curve (the MC of production) in the market for the king crab. draw the social cost curve associated with over harv..
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